Canada Monetary Policy


Canada?s Central Bank remains dovish

At its 25 October monetary policy meeting, the Bank of Canada (BoC) left the target for the overnight rate unchanged at 1.00%, which was broadly expected by market analysts. The Central Bank stated that ?there is considerable policy stimulus in Canada?, reiterating its dovish stance and allaying the possibility of further rate cuts. The Central Bank quoted increasing risk aversion in the financial markets, as well as the deteriorating economic outlook in the Eurozone as the main factors behind Bank's decision. Monetary authorities have maintained rates unchanged since September 2010. Turning to the domestic economy, the Bank stated that ?economic momentum has slowed and is expected to remain modest through the middle of next year.? The Central Bank also stressed that it expects inflation to remain within target over the medium term as both upside and downside risks to inflation are ?roughly balanced over the projection horizon.?


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